Outlook of Heavy Crude Oil in Arab Countries: Challenges ... 2 0900 Samir Outlook of Heavy Oil... · Outlook of Heavy Crude Oil in Arab Countries: Challenges & Opportunities 1 . MEDW

MEDW & Petchem Arabia 2013

Outlook of Heavy Crude Oil in Arab Countries: Challenges & Opportunities

1

MEDW & Petchem Arabia 2013 Abu-Dhabi 12-15 May, 2013

1. OAPEC in brief

2. Objectives of the presentation

3. Definitions and characteristics of heavy crude oils.

4. Heavy oil Resources and Production in the Arab Countries

5. Major heavy oil projects in the Arab Countries.

6. Challenges of processing heavy crude oils.

7. Factors affecting the selection of heavy crude oil processing scheme.

8. Drivers behind upgrading and refining heavy crudes in Arab countries.

9. Conclusions and recommendations 2


1. To review the statistics of heavy oil resources and

production in the Arab Countries

2. To highlight major heavy oil exploitation projects in the

Arab Countries

3. To briefly explain simple and complex refineries

4. To demonstrate why and when refineries in the Arab

Countries are required to be upgraded.

3

•,

OAPEC

(أوابك) منظمة األقطار العربية المصدرة للبترول

The Organization of Arab Petroleum Exporting Countries (OAPEC)

Petrochem Arabia Conference 2013, Dammam: 13-15 January 2013

•,

OAPEC

The Organization of Arab Petroleum Exporting

Countries (OAPEC) in Brief

• Algeria • Bahrain • Egypt • Iraq • Kuwait • Libya • Qatar • Saudi Arabia • Syria •Tunisia (Frozen) • United Arab Emirates

Member Countries

Founded in 1968

Domiciled in Kuwait

The Organization of Arab Petroleum Exporting Countries (OAPEC) is a regional inter-governmental organization.


•,

OAPEC



Ministerial council

Executive Bureau General secretariat Judicial Tribunal

The Organization carries out its functions and responsibilities through the following four organs:


•,

OAPEC



The General Secretariat is composed of the following:

The Secretary General’s Office The General Secretariat is headed by the Secretary General who carries

out the tasks assigned to him by the Council.

The Arab Center for Energy Studies: The Technical and the Economics Departments, together, comprise the

Arab Center for Energy Studies, whose formation was called for by the

Council of Ministers in 1982.

The Information and Library Department

Finance and Administrative Affairs Department


8

• Light Oil: Oil with > ~25º API gravity

• Medium Oil: Oil with API gravity of ~20-25°API

• Heavy Oil: Oil with API gravity between 10 and 20° API

(viscosity 1,000-5,000 cP)

• Extra Heavy Oil or Natural Bitumen:

– Oil with API gravity less than 10° and viscosity is commonly

between 5,000 to 10,000 cP.

• In short, heavy oil is defined as any type of crude oil that does

not flow easily

• Resources means original oil in place


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Bitumen

Viscosity at reservoir conditions

<10,000 cp >10,000 cp

AP

I G

ravity

10o

22o

Extra-heavy oil

Heavy oil Conventional

Unconventional

Definitions of Heavy Crude Oil and Bitumen


10

Global Heavy Crude Oil Outlook to 2035

- Based on the economic developments in 2011-2012, oil

demand continues to be moderate and will remain so over

the short term. However, over the medium and long term oil

demand growth will resume to fulfill the needs of developing

non-OECD countries, especially China, India, Russia and

Brazil. On this basis,

Heavy crude oil volume growth Is robust.

- Currently, 85% of heavy oil production is from conventional

sources; by 2030, 50% will come from unconventional sources.

- The highest growth will come from the Canadian oil sands

- A second major source of supply growth is the Orinoco extra-

heavy crude oil from Venezuela.

Source: Heavy Crude Oil: A Global Analysis and Outlook to 2035 (Hart Energy, 2012)


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- The Middle East has several giant underdeveloped heavy oil

fields and it assumes to begin producing before 2020; this

region will experience the highest heavy oil production growth

in percentage terms (11% per year through 2025).

Global Heavy Crude Oil Outlook to 2035

- Africa will continue to develop heavy oil through 2025, while

in Europe, Russia and Central Asia the heavy crude oil

production will slowly decline.

- The heavy crude oil will be traded globally; it enters the

export market in all regions through 2025, after which it goes

to zero in Asia-Pacific and declines from all regions except

North America and South America.

- Conventional heavy crudes and unconventional extra-heavy

crudes and bitumen will be a significant source of future liquid

supplies over the next 25 years.


Density @ 15°C > 0.993 or API gravity < 20

High Viscosity (100 to 10,000 CP)

10 100 1000 10,000 100,000

35 20 15 10 5

Light Crude Heavy Crude Extra Heavy Oil

(Tar Sand Oil & Bitumen)

Viscosity (CP)

Gravity, °API

12


Sulfur content, wt%

Gravity, °API

Heavy

Sweet

Heavy

Sour

Medium

Sweet

Medium

Sour

Light

Sweet

Light

Sour

10 35 60

0

26

1.0 0.5 1.0

13


33 50

63

34

26

22 30

21 14

3 3 1

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Light Medium Heavy

Light end

Gasoline

Middledistillate

Residue

14


°AP

I

Su

lfu

r w

t%

0

1

2

3

4

5

0

10

20

30

40

50

Hassi

Messaoud

Bu Attifel Basra Arab Light Arab Medium Ratawi/Burgan

°API Sulfur wt%

Algeria Libya Iraq S. Arabia S. Arabia Kuwait

15


0

5

10

15

20

25

30

35

40

0

1

2

3

4

5

6

Basra, Iraq Kuwait Ratawi/Burgan,Kuwait

Eocene, Kuwait

°API Asphaltene wt %

°AP

I

Asp

halt

ene w

t%

16


Source: WOGR, Eni, 2011

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

Light (≥ 35 API)

Medium (26-35 API) Heavy (≤ 26 API)

1995 2000 2005 2010

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32.7

32.8

32.9

33

33.1

33.2

33.3

33.4

33.5

33.6

1.1

1.15

1.2

1.25

1.3

1.35

2010 2015 2020 2025 2030 2035

Sulfur wt% °API

Su

lfu

r w

t.%

°AP

I

The average quality of crude oil is getting worse

Source: WOO,opec,2011 18


0

2000

4000

6000

8000

10000

12000

14000

16000

Light (≥ 35 API)

Medium (26-35 API) Heavy (≤ 26 API)

1995 2000 2005 2010Source: WOGR, Eni, 2011

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34%

65%

1%

1995

36%

61%

3%

2010

Light (≥ 35 API)

Medium (26-35 API)

Heavy (≤ 26 API)

Despite of the increase in light crude share in Arab countries during the

last two decades, the share of heavy crude oil production increased

from 1% to 3% of the total oil production.

20


0

1000

2000

3000

4000

5000

6000

7000

8000

Algeria Egypt Iraq Kuwait Libya Qatar Saudi

Arabia

Syria UAE D. Zone

Light API>35 Medium API 26-35 Heavy API<26

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Country Discovered Resources (Bn Bbl)

Daily Production (KBbl/d)

API ( ̊)

Iraq 447 65 16-22

Kuwait 190 60 14-20

Saudi Arabia 190 40 14-19

Neutral Zone

Egypt 25 72 12-20

Oman (not OAPEC) 25 10-19

Syria 14 20 15-20

Bahrain 2 8-14

UAE

Algeria

Qatar

Tunisia

260

135

Source: Schlumberger, UXGS, World Energy Council

22


Partitioned Neutral Zone (Kuwait and KSA):

Heavy oil is producing in Wafra field through thermal methods.

•The challenges to implement the plan are : finding energy (gas) and fresh water to generate steam.

23 Source: Hamid Majid, Canadian Natural Resources Limited, Calgary, Alberta, Canada.


Oman

1. Mukhaizna field: utilizing a modified SAGD method with vertical steam injectors around horizontal producers. The field produces about 120,000 bbl/d (2012). 2. PDO at Marmul field (90 cP viscosity) using a small polymer flood 3. PDO at Harweel field, is injecting miscible sour gas to enhance recovery 4. PDO at Qarn Alam, is utilizing steam injection to improve production of 16 API

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Kuwait :

• KOC is focused on developing its extensive heavy oil resources of sandstone host rock at

Ratqa field. KOC’s plan is to produce 60,000 bbl/d by 2013 and then to increase it to 170,000 bbl/d. Currently Kuwait producing heavy oil through primary recovery methods.

• Kuwait has been trying to exploit its heavy oil since middle of 1980s. So far no heavy oil production exists except through primary recovery.

Egypt :

• At Issaran Field , heavy Oil 10-12 API: producing from carbonate and sandstone host rocks utilizing Cyclic Steam Stimulation where sufficient fracturing exists to distribute the steam within the host rocks.

• Egypt produces about 70,000 bbl/d heavy oil mainly on primary recovery method.

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Syria :

• Syrian Petroleum Company is producing about 20,000 bbl/d of 15-20 API. Some of the production utilizes steam injection

• i.e. : Oudeh, Tishrine oil fields are on Cyclic Steam Stimulation.

Tanganyika Oil implemented CSS pilot study in 2004. After the steam injection, the production in both fields increased to 3,500 bbl/d from 1,400 bbl/d. Presently, CNPC is continuing the project

Bahrain :

• is planning to exploit the heavy oil reserves of the Awali oil field. The steam injection trial commenced in 2012.

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Iraq:

• Most of the heavy oil production (60,000 bbl/d) is by primary recovery. No thermal or any other techniques are utilized.

Other OAPEC members

• Libya, Qatar, Algeria, Tunisia and UAE do not have economic amounts of heavy oil resources for consideration

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Processing heavy

crude oil requires

upgrading the refinery

metallurgy to handle

high acid crude oils.

Relationship of corrosion rate and

crude sulfur content

Increase in the refinery operating costs

28


Relationship of carbon residue to crude properties

High contents of Asphaltenes enhance the potential for

fouling of heat exchangers and reactors. 29


The heavier feedstock

require substantially more

hydrogen to produce

products with a limited

amount of sulfur.

Increase Hydrogen Consumption

30


Metals such as Nickel and Vanadium in the heavy crude

deactivate the hydroprocessing catalysts.

Catalysts Deactivation

31


Crude oil

Desalter

Heater

Reflux Drum

Sour water Wash

water

Fra

ctio

nat

or

Challenges to dehydration and desalting technologies

32


Environmental challenges, due to the increase in

air emissions, water use and solid wastes.

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Heavy

Crude

Oils

Diluting with a lighter crude to create a higher quality crude

Selling directly to refineries that can handle heavy crude oils

Producing high quality finished products

Upgrading to create a higher quality crude

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Diluents

Steam

Condensate

Natural gas

Boiler

Extractor

Steam methane reformer

CDU/VDU/HDS/ RHCU/DCU

Blender

Different

grade of

synthetic

crude Blender

Hydrogen

Synthetic

diluent

Water

Heavy

crudes

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•Economics consideration.

•Location, logistics and utilities availability.

•Available and proven technology at the time of decision.

•Market demand for the petroleum products quality.

•Possible integration between partial upgrading on site and refining.

36


Produce higher value by products like paraffin oils.

Achieve higher refining margins.

Turn low-quality crude oil into valuable clean products.

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Egypt

Syria

Iraq

•Deir Alzor,140

•Fruglos, 100 •Nasiriya,300

•Kerbala,140

•Misan, 150

•Kerkuk, 150

•East Baghdad, 100

Mina Alzour, 615

Kuwait Qatar

Sudan

Libya

Algeria

Tonisia

•Jubail, 400

•Yasref, 400

•Ras tanoura, 400

•Jazan, 400

Ain Al-sukhnah, 130

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92

54

146

0

20

40

60

80

100

120

140

160

New Refineries Revamping

Existing Refineries

Total Investment

$ Billion

39


Source: WOO,opec,2011

0

5

10

15

20

25

30

35

40

Ethane/LPG Naphtha Gasoline Jet/Kerosene Diesel/Gas oil Residue

2010 2035

Global product demand, 2010 and 2035

40


• There are about 900 B barrels of heavy oil resources in the Arab countries.

• Exploitation of heavy oil in the Arab countries is still in the early stage except in the Neutral Zone of Kuwait and Saudi Arabia as well as Oman.

•High grading, experience / expertise, choice of technique, patience.

• Utilizing the right technology and expertise, heavy oil can be effectively and economically produced in this region particularly, in KSA, Iraq, Kuwait, Egypt, Oman and Syria.

• Due to future environmental regulations, Arab countries need to upgrade their refineries to refine the heaver fuel oil products outputs.

• Feasibility studies to determine economics of processing heavy oil in the Arab countries should be initiated.

• NOCs of the Arab Countries should consider utilizing the expertise and proven experience of International Oil companies when considering the exploitation and refining of heavy oil resources.

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Advanced technologies help refiners to convert marginal heavy crude

into valuable products.

Refineries with the flexibility to process sour and heavier crude oils

will continue to show positive margins.

Processing of heavy crudes pose different challenges for the refiners.

Refineries worldwide tend to cope with greater quantities of heavy oil

as the world is shifting slowly towards sour and heavier oils.

Arab countries have decided to upgrade and expand their refineries to

maximize its flexibility to process heavier crude oils.

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Documents

Outlook of Heavy Crude Oil in Arab Countries: Challenges ... 2 0900 Samir Outlook of Heavy Oil... · Outlook of Heavy Crude Oil in Arab Countries: Challenges & Opportunities 1 . MEDW